Federal Wire Act and How it Affects Online Gambling

The laws pertaining to online gambling for US citizens have long been misunderstood or misinterpreted. Prior to becoming involved in any type of online gambling for money, it is very important for every individual who is considering online gambling to read the current laws and make sure they understand what it legally acceptable. This page was created in order to provide a comprehensive explanation concerning the Federal Wire Act and its affect on what legal online gambling options are available to players throughout the United States.

What Is The Fed Wire Act?

To paraphrase the Federal Wire Act of 1961, anyone who shall become involved in the transmission of a wire communication, including but not limited to the wiring of funds, for the purpose of gambling shall be held in violation of the law and subjected to possible fines and imprisonment. In December of 2011, the US Department of Justice sent out clarification of how the law would be enforced. They stated "interstate transmissions of wire communications that do not relate to a 'sporting event or contest' fall outside the reach of the Wire Act." Shortly thereafter, the U.S. Fifth Circuit Court of Appeals confirmed that the law was only applicable to "sports betting." That means online poker, online casino gambling and playing lotteries are completely acceptable forms of interstate gambling. It should also be noted that the law is primarily focused on owners and operators of illegal gambling operations, and not the players.

What Impact Does the Federal Wire Act Have on Gamblers in The US?

Despite the clarification, the law remains a bit of an enigma for gamblers who live in the United States. It's important to note that over the last decade, most states have passed legislation allowing some form of live casino gambling. However, only a couple of states allow wagering of any type related to sporting events. That might help explain the Fed Wire Act's targeting of wagering on sporting events. Where it gets fuzzy for US gamblers is when they choose to gamble with an online casino that is located in a foreign jurisdiction. Many of these online casinos also offer sports wagering. While gaming in the casino might be considered legal based on the court's interpretation of the law, some players are concernied about whether betting on sports through the same foreign site could be considered an illegal act. To what extent can the DOJ enforce the laws?

Practical Application of the Law

First, the DOJ has no jurisdiction over online gaming sites owned by foreign concerns as long as they are not physically located in the US. Therefore, it is more than reasonable to assume that the DOJ will not be able to obtain records from offshore gaming sites that are prohibited from sharing these records with anyone other than the jurisdiction in which they operate. From a practical standpoint, that means that the DOJ has no recourse even if they suspected sports gambling. Simply put, there is nothing illegal about transferring money to an offshore gaming site and gambling with those funds. The DOJ has no interest on how those funds are used as long as it's not taking place in the US.

The Impact of the Federal Wire Act on Offshore Sportsbooks

Even as the gaming laws in America continue to evolve, there are still some jurisdictions such as Malta, Gibraltar and the UK that choose to prohibit sites from accepting players from the US. They do this because the laws are still a bit confusing and they simply choose to not become involved and risk any future issues related to accepting US players. That said, there are a few jurisdictions that have a full grasp on the how the Fed Wire Act in being applied, and they feel comfortable allowing US players to sign up and play. The real money sports betting sites recommended in this guide are among those brands which are licensed to offer their betting services to US players.

What Is The Future of Online Sports Betting?

US players have money and love to gamble online. Most online gaming sites are interested in including these players as part of its clientele. In America, the laws are starting to shift and all forms of gambling are being treated within a more liberal viewpoint. It seems only a matter of time before the Fed Wire Act becomes dated. Until then, US players should feel safe and comfortable gambling at reputable offshore sites as there are no laws which prohibit them from doing so as long as the sites are legally licensed and regulated.

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